SEC proposes conditional crypto self-custody for advisers, funds and state trust companies
The SEC proposed rules letting advisers and regulated funds hold client crypto when no permitted custodian is available, and letting state trust companies act as custodians, with a 60-day comment period.
Why it matters
Advisers have turned down tokens they cannot place with a qualified custodian; in a May 2025 submission to the SEC the Digital Chamber said some advisers declined token allocations or asked portfolio companies to retain them until custody existed. The proposal offers a conditional route instead of a blanket exemption, and it is the SEC's own rulemaking push after the Clarity Act failed in the Senate. Its effect depends on the comment period and on whether the Commission adopts a final rule.
Where the sources disagree
Whether the proposal lets investors hold their own crypto or lets advisers hold it for them
Advisers could let clients hold their own digital assets rather than routing them through a qualified custodian (Bitcoin Insider)
Bitcoin Insider
Advisers hold client crypto themselves as custodians; no investor self-custody (Unchained, Bankless, Finance Magnates, Bitcoin.com News)
Unchained, Bankless, Finance Magnates Crypto, Bitcoin.com News
Bitcoin Insider described the draft as opening a path for advisers to let clients hold their own digital assets, while Unchained, Bankless and Finance Magnates described advisers retaining control of private keys on clients' behalf, which is also how Commissioner Peirce reads it.
Key facts
Self-custody would be permitted only after an adviser concludes that no permitted custodian is available, with that determination repeated every quarter.
Reported by Bitcoin.com News
The proposal would formally recognise state-chartered trust companies as custodians of adviser client and regulated fund crypto.
Reported by Crypto News Flash
The proposal runs to roughly 760 pages.
760 pagesReported by Bitcoin Insider
The comment period runs for 60 days after publication in the Federal Register.
60 daysReported by Crypto.News
Commissioner Hester Peirce said the proposal uses the term self-custody in a way that does not reflect true self-custody by investors, because it covers advisers acting as custodian.
Reported by Unchained
Chair Paul Atkins said existing custody rules predate the internet and that with newly developed crypto assets custodial capabilities may lag deployment by many months.
Reported by Crypto News Flash
What happened
The SEC proposed rules on Oct. 1 that would let registered investment advisers and regulated funds hold client crypto themselves when no permitted custodian is available, and would let state trust companies act as crypto custodians. The roughly 760-page proposal covers registered investment advisers, registered investment companies and business development companies under the Investment Advisers Act of 1940 and the Investment Company Act of 1940, and also updates adviser financial-statement audit requirements and how broker-dealers provide custodial services to regulated funds. An adviser relying on self-custody would have to document each quarter that no permitted custodian is available, show expertise for each asset, require at least two people to approve any transaction, keep separate addresses per client, submit to outside accountant reviews of its controls and give clients account statements at least quarterly. Chair Paul Atkins said custodial capability can lag a newly deployed asset by many months and that advisers and funds have been left guessing how to hold it lawfully, while Commissioner Hester Peirce said the draft uses the term self-custody in a way that does not reflect investors holding their own keys. Bitcoin Insider reported the proposal would let advisers' clients hold their own digital assets rather than routing them through a qualified custodian, a different account from the one Unchained, Bankless and Finance Magnates give of advisers controlling private keys on clients' behalf. The 60-day comment period begins at Federal Register publication, and the rules will not take effect unless the Commission adopts a final rule.
How the story developed
- First report
First report by Crypto News Flash
SEC Opens Crypto Self-Custody Path for Investment Advisers
- Update
SEC publishes crypto custody proposal for advisers and regulated funds
The roughly 760-page draft covers self-custody when no permitted custodian is available, state trust company custody, adviser audits and broker-dealer custodial services.
- Official statement
Atkins statement sets out the custody gap
Atkins said rules have not kept pace with a multi-trillion-dollar asset class and that custodial capability can lag a new asset by many months.
- Independent corroboration
Independently corroborated by Cointelegraph
SEC moves to clear custody hurdle for advisers offering crypto
- Official statement
Official statement from Bitcoin.com News
SEC Proposes Letting Advisers and Funds Self-Custody Crypto Assets
- Official statement
Peirce disputes the self-custody terminology
The commissioner said the draft's use of the term does not reflect true self-custody by investors because it covers advisers acting as custodian.
- Update
Comment period timing clarified
Crypto.News reported that the 60 days begins at Federal Register publication rather than at the SEC news release, and that the release is a map to a proposed rule rather than a substitute for its conditions.
- Update
Background: earlier SEC custody proposal withdrawn
Bankless cited a 2023 proposal under Gary Gensler's SEC that limited advisers to a short list of qualified custodians, which a16z called illegal, infeasible and dangerous and which was later withdrawn; Bitcoin Insider described a proposal from roughly three years earlier that expanded custody obligations.
- Update
Proposal follows SEC innovation exemption and CFTC rulemaking filing
Bankless and CryptoPotata placed the draft after the SEC's innovation exemption and a CFTC rulemaking filing in the month before Oct. 2, with the Clarity Act having failed in the Senate.
- Mainstream pickup
Picked up by mainstream media (Finance Magnates Crypto)
SEC Proposes Last-Resort Crypto Self-Custody for Advisers and Funds
How coverage built up
Independent sources over time, counted the way the consensus panel counts them: a republication of a wire story does not move the line.
- 1 Oct 2026, 20:10 UTC: Crypto News Flash — 1 independent source, 1 reports
- 1 Oct 2026, 22:43 UTC: Crypto News (CryptoNews.net) — 2 independent sources, 2 reports
- 2 Oct 2026, 01:07 UTC: Cointelegraph — 3 independent sources, 3 reports
- 2 Oct 2026, 02:30 UTC: Bitcoin.com News, official — 4 independent sources, 5 reports
- 2 Oct 2026, 05:45 UTC: U.Today — 5 independent sources, 9 reports
- 2 Oct 2026, 09:41 UTC: Unchained — 6 independent sources, 11 reports
- 2 Oct 2026, 10:47 UTC: Crypto.News — 7 independent sources, 12 reports
- 2 Oct 2026, 17:56 UTC: Bankless — 8 independent sources, 13 reports
- 2 Oct 2026, 18:00 UTC: Finance Magnates Crypto, Mainstream media — 9 independent sources, 14 reports
- 2 Oct 2026, 18:49 UTC: CryptoPotato — 10 independent sources, 15 reports
Affected entities
Also mentioned: Coinbase, United States, Brian Armstrong, Ethereum, Solana, China, Gary Gensler
Original sources
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